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300 dpi 4 col x 8.75 in / 196x222 mm / 667x756 pixels Ana Lense Larrauri color illustration of the cost of a wedding; bride and groom prepare to kiss while holding a dollar sign. Miami Herald 2006

Talking dollars and cents
By Melissa Introne Local-I-Dos

Couples may already be talking budgets and finances as they prepare for the costs of a wedding, but after the "I do's" are over, building a stable financial future as husband and wife requires communication and planning.

Alyssa McNamara Reed, adviser at McNamara Financial Services in Marshfield, breaks down the steps couples should take as they prepare for their joint financial future.

Delegate and budget

Reed says making a budget is one of the first things couples should do together.

"Talk about what is important to each of you - your financial goals and how to work towards those. Then compare your budget to what you are actually spending," she said.

Knowing where money goes and thinking before spending is key.

"Couples should also find a way to have both people involved in the finances," she said. "One partner may be making smarter financial decisions simply because she or he is seeing the numbers every month and the other one is not."

Paying down debt vs. investing

Reed recommends young couples have each person contributing 10 to 15 percent of their gross pay into a 401(k) or IRA investment. After those contributions are made, work with the net balance for budgeting purposes, including monthly expenses, debt payments, savings and additional investments.

"High interest debt, like credit cards, should be worked down as soon as possible," Reed said. "Lower interest debt, like student loans, should be paid off in conjunction with building savings and retirement funds."

Emergency savings

Reed said it's important to have some cash available in case of emergencies.

"Emergencies happen. Layoffs, medical bills, accidents, or house repairs," Reed said. "You do not want to have to rely on a credit card when the time comes."

She recommends having three to six months of what you spend each month in savings. If a couple has a lot of debt, building a small savings (one to two months) before tackling debt, then re-focusing on the savings, is another strategy.

Beneficiaries and insurance

When looking to buy a home or have children, it's especially important couples have appropriate insurance coverage.

"Be careful if all or most of your coverage is through your employer. If you leave the company, the insurance usually doesn't go with you," Reed said. When evaluating insurance needs as a newly married couple, also update all beneficiaries on retirement plans and insurance policies.

Home buying

"One of the biggest mistakes new couples make is buying too much house," Reed said. "Simply because you can afford a certain amount, does not mean it's what you should be spending." Reed explains that buying the maximum amount of house doesn't leave flexibility for the additional costs of children, daycare, new cars and retirement - or the decreased income if one spouse decides to stay home with the kids.